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Top Headlines - part 11

Beer Industry: Heineken Cuts 2013 Profit Outlook After Weak Third Quarter

Beer Industry: Heineken Cuts 2013 Profit Outlook After Weak Third Quarter

BUSINESS

  • Heineken revises outlook for second time in 2013
  • Sales in emerging markets not as strong as expected
  • Volume dropped 8% in central and eastern Europe

The world’s third-largest brewer Heineken NV revised its outlook for 2013’s full-year profit after a weaker than expected third quarter in both emerging and mature markets. This is the second time Heineken revised its outlook; in April, it lowered expectations for sales growth.

In the third quarter, consolidated organic beer volume fell 3%, and earnings were down 15% with net profit dropping to $665 million. Revenue grew 0.2% excluding acquisitions.

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British Government Okays First Nuclear Plant In 20 years

British Government Okays First Nuclear Plant In 20 years

BUSINESS

  • Plant part of UK domestic power strategy to move toward low-carbon energy
  • New plant to provide 7% of Britain’s electricity over next 60 years
  • Plant to be owned by French-Chinese consortium

The British government has approved the construction of the first new nuclear power plant in 20 years as part of a domestic-power strategy.

To be built by a foreign consortium at Hinkley Point C in southwestern England, the plant is expected to provide 7% of Britain’s electricity demand for 60 years, which is enough to power 6 million homes.

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China Invests In British Nuclear Power Plants

China Invests In British Nuclear Power Plants

BUSINESS

  • China approved to take stake in British nuclear power to lower risk of blackouts, increase financing in low-carbon energy
  • Deal expected to advance Britain’s plans to build a new nuclear reactor
  • China’s nuclear expansion marks end of moratorium post-Fukushima disaster

Chinese businesses have been granted permission to invest in nuclear power plants in the UK as Britain aims to lower the chance of blackouts and increase financing in low-carbon energy up to $177 billion through to 2020.

The deal is also expected to advance Britain’s plans to build a brand new nuclear reactor, its first in almost 20 years. The new reactor will feed into Britain’s overarching goal of developing a minimum of 12 reactors at five locations by the year 2030.

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Automotive Manufacturing Leader Toyota Recalls 885,000 Vehicles Worldwide

Automotive Manufacturing Leader Toyota Recalls 885,000 Vehicles Worldwide

BUSINESS

  • Recalled vehicles may have leak in air conditioning unit
  • Incident marks Toyota’s third US recall this quarter
  • Toyota has recalled 6 million vehicles in 2013

Japanese automaker Toyota is recalling 885,000 vehicles worldwide after discovering an air conditioning unit problem that can lead to airbag and power-steering problems. The models affected by the recall include the Toyota Venza, Avalon, Avalon Hybrid, Camry and Camry Hybrid models from 2012 and 2013.

The recall is focused on a water leak from the air conditioning condenser unit, which can cause a short circuit that could result in the airbags to inadvertently deploy or become disabled.  In rare cases, power steering could also become disabled.

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Food Group Danone Revises Sales Goals After Weak Third Quarter

Food Group Danone Revises Sales Goals After Weak Third Quarter

BUSINESS

  • Company image harmed by July baby-food recall
  • Water, dairy unit sales increased
  • Latest in recent setbacks for Danone

French food group Danone SA, the world’s largest yogurt manufacturer, has been forced to revise its full-year sales, profitability and free cash flow targets after an Asia recall of high-margin infant formula this summer led to weak third quarter sales. Like-for-like sales growth is now estimated to be between 4.5% and 5%, down from the company’s previous estimate of at least 5%.

Third quarter sales of baby foods fell 8.6%, and the recall is expected to cost Danone $473 million in lost sales. Sales in September were only 40% of sales in July. "Our priority is to get back on track for strong and sustainable growth in this region (Asia) as early as possible in 2014," says Chief Financial Officer Pierre-Andre Terisse.

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AstraZeneca Buys Biotech Company Spirogen To Focus On Oncology

AstraZeneca Buys Biotech Company Spirogen To Focus On Oncology

BUSINESS

  • AstraZeneca’s biologics research and development arm MedImmune acquires Spirogen for $200 million
  • Investment could increase by $240 million if milestones are met
  • AstraZeneca to focus on antibody-drug conjugates and immune-mediated cancer therapy

London-based pharmaceutical giant AstraZeneca’s global biologics research and development arm MedImmune has acquired privately-held biotech company Spirogen, which focuses on antibody-drug conjugate technology used in oncology.

AstraZeneca will initially pay $200 million and add on $240 million more provided Spirogen’s products meet all of the predetermined development milestones.

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Social Media Giant Facebook Buys Mobile Analytics Company Onavo

Social Media Giant Facebook Buys Mobile Analytics Company Onavo

BUSINESS

  • Facebook buys Onavo to support its Internet.org initiative, which aims to expand internet access to billions of people who are not online
  • Onavo helps reduce mobile phone costs with more efficient use of data, can measure app performance
  • People in emerging markets are kept offline because of high costs and prepaid tariffs

Facebook Inc., the world’s largest social network, has purchased Israeli mobile analytics startup Onavo to support its mobile business and Internet.org initiative, a project that aims to expand internet access to billions of people who are not online.  The terms of the deal were not disclosed, but Israeli news sources estimate it is between $100 million and $200 million.

With a focus on smartphones, Onavo's mobile app helps reduce mobile phone costs with the more efficient use of data.

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Teva Pharmaceuticals Cuts 5,000 Jobs To Reach Savings Target

Teva Pharmaceuticals Cuts 5,000 Jobs To Reach Savings Target

BUSINESS

  • Teva to lay off 5,000 employees as best-selling drug faces increasing competition
  • Cutbacks expected to save $2 billion by end of 2017
  • Teva to promote research programs and enlarge its generic-drug business, while aggressively streamlining assets from non-core businesses

The world’s largest marker of generic drugs Teva Pharmaceutical Industries is cutting 5,000 jobs, or 10% of its labor force, to combat increasing competition. The restructuring will incur $1.1 billion in total charges, but cuts are expected save the company nearly $2 billion by the end of 2017.

Teva’s workforce cuts are Chief Executive Officer Jeremy Levin’s means of increasing the company’s profitability and reaching target cost savings he set out in 2012.

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Toyota Reducing Price of 2014 Prius Plug-In Vehicle In US To Boost Sales

Toyota Reducing Price of 2014 Prius Plug-In Vehicle In US To Boost Sales

BUSINESS

  • Toyota Motor Corp cuts price of 2014 Prius plug-in models to meet California’s Zero-Emission Vehicle Program, boost sales
  • Toyota sold 12,750 Prius models in 2012, missing goal of 15,000  
  • GM’s Volt plug-in leads hybrid sales in the US followed by Nissan’s all-electric Leaf hatchback

Automotive manufacturer Toyota Motor Corp, the world’s largest seller of hybrid vehicles, is reducing the price of its 2014 plug-in Prius models in the US to meet California’s Zero-Emission Vehicle Program.

Toyota has the largest share of vehicle sales in California, and must sell more low-polluting models than its competitors. The reduction is intended to boost sales and American consumers’ willingness to buy rechargeable vehicles. 

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Walmart & Bharti Enterprises End Joint Retail Venture In India

Walmart & Bharti Enterprises End Joint Retail Venture In India

BUSINESS

  • Walmart to purchase Bharti’s 50% stake to take control of 20 wholesale stores
  • Walmart unable to set up stores without Indian partner; laws in India very restrictive to foreign retailers
  • Walmart not in talks with potential partners, but plans to continue to expand its cash and carry business

Walmart Stores, the world's largest retailer, is ending its six-year partnership with business group Bharti Enterprises, leaving it without a domestic partner in India. The partners operate wholesale cash and carry stores under the name Best Price Modern Wholesale, and are working to finalize details of the dissolution

Walmart will purchase Bharti's 50% stake for an undisclosed amount, giving it control of 20 wholesale stores and its supply chain. Bharti, meanwhile, will purchase Walmart’s compulsory convertible debentures in Cedar Support Services, a company owned and controlled by Bharti Enterprises.

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